The courts issued a stunning rebuke to the Public Employment Relations Commission for its reversal of over 30 years of labor relations policy in two decisions that had no longer required or even permitted employers to pay automatic increments after the expiration of a contract. Appellate Division Decision. In a decision involvingAtlanticCounty, PERC disavowed what is called the “dynamic status quo” doctrine and ruled that the County’s decision not to pay salary/step increments was not an unfair practice. P.E.R.C. No. 2014-40. In a related decision involving Bridgewater Township, PERC ruled that payment of salary/step increments after contract expiration is no longer subject to negotiations and that an agreement to pay those increments is not enforceable in arbitration. P.E.R.C. No. 2015-11.

The appellate court reversed PERC on both counts. The court ruled that PERC’s two decisions were outside it legislative mandate. The court noted that the 2% tax levy cap and the 2% interest arbitration award cap did not extend to increments and that PERC did not have the authority to do what the Legislature chose not to do. Finally, the court stated that PERC undermined the parties’ legitimate expectations based on their negotiations and their contracts.

AtlanticCounty, Bridgewater and PERC have filed petitions asking the New Jersey Supreme Court to review the cases.